The Demise of the Dollar
Robert Fisk, Middle East correspondent who for decades has proven to be almost never wrong in his assessments, provides this one which has profound implications for the future of the American (and global) economy.
In the most profound financial change in recent Middle East history, Gulf Arabs are planning - along with China, Russia, Japan and France - to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.
Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.
The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.
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Ever since the Bretton Woods agreements - the accords after the Second World War which bequeathed the architecture for the modern international financial system - America’s trading partners have been left to cope with the impact of Washington’s control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.
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“These plans will change the face of international financial transactions,” one Chinese banker said. “America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”
Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.
You can go ahead and stick a fork in the American economic empire. Its finished, and nearly 800 global military installations aren’t going to be able to do much of anything about it.
on November 15th, 2009 at 5:53 pm
Yummy! Your front page of articles is a delicious three-layers of cake-and-eat-it-too. At the bottom, a rich layer of complaining about American military imperialism. In the middle, a gooey truffle of lamenting capitalist economic inequality. And the icing to top it all off– an ironic vanilla glaze bemoaning the declining value of the dollar relative to other currencies and its effect on American wealth! Are you serious?
on November 15th, 2009 at 9:38 pm
A colorful post from “Oannes,” but one that is somewhat deficient on explanation in regards to how the variety of posts contained here represent some form of ‘cake-and-eat-it-too” syndrome. By the nature of the commentary, it seems perhaps the writer may be more of the “let-them-eat-cake” perspective. To follow their analogy, there exists a pretty hefty portion of nutrient-laden, meat-and-potatoes dishes of salient and lucid research and analysis which pretty convincingly demonstrates that these issues of gargantuan amounts of American debt-laden spending on military budgets, the ongoing global deployment of these said resources, domestic economic instability and the decline of American currency, are pretty inherently related phenomenon.
on November 17th, 2009 at 2:31 pm
I was just bullshitting you, man. I just thought it would make you happy to give somebody the smackdown.